User Account

All Pages

General partnership problem

Assignment Help Accounting Basics
Reference no: EM13147130

Celeste contributed business-related assets valued at $250,000(basis of $100,000) in exchange for her 50% interest in the Celestine Partnership. Ernestine contributed land and a building valued at $400,000(basis of $200,000) in exchange for the remaining 50% interest. Ernestine's property was encumbered by a qualified nonrecourse debt of $150, 000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year:

Sales 350,000
Utilities, salaries, and other operating expenses- $190,000
Qualified dividend income- $6,000
Tax-exempt interest income - $2,000
Charitable contributions - $1000
Distribution to Celeste -$20,000
Distribution to Ernestine - $16,000

a. How would Celestine's ending liabilities be treated if they formed an LLC, instead of a general partnership?

b. How would Celestine's basis and amount at risk be different?

Reference no: EM13147130

Questions Cloud

Explain an electron is confined to a linear region : an electron is confined to a linear region with a length of the same orderas the diameter of an atom (about 100 pm)
Ending balance for merchandise inventory : What were the beginning balance and ending balance for Merchandise Inventory?
Compute the value of vap for this liquid : A certain liquid has a vapor pressure of 92.0 Torr at 23.0 °C and 400.0 Torr at 45.0 °C. Calculate the value of ?H°vap for this liquid.
How many kilometers does she run : A jogger runs at an average speed of 5.9 mi/h. a. How fast is she running in m/s? b. How many kilometers does she run in 98 min?
General partnership problem : How would Celestine's ending liabilities be treated if they formed an LLC, instead of a general partnership?
How is the distribution treated for tax purposes : Michele's stock has a basis of $11,000 and Wally's stock has a basis of $26,000. How is the distribution treated for tax purposes?
Behavioural advantages and potential disadvantages : What are the behavioural advantages and potential disadvantages that could arised from responsbility accounting and how the disadvantages can be overcome by company.
Calculate roi for independent investments : Maria Chevas bought a GIC (guaranteed investment certificate) on June 1 for $3,200. The certificate reached maturity on December 1 (it was a six-month certificate). On December 1, she cashed in the certificate and received her original $3,200 back..
Compute the energy density in the range : The Planck distribution gives the energy in the wavelength range dA at the wavelength A. Calculate the energy density in the range 650 nm to 655 nm inside a cavity of volume

Reviews

Write a Review

Accounting Basics Questions & Answers

  Generals coupon promotion expense

The coupons expire on December 31, 2012. There were 45 million coupons redeemed in 2011, and 30 million redeemed in 2012.What was General's coupon promotion expense in 2011?

  Share of the subsidary income computation

The parent company acquires all of a subsidary's common stock but only 70 percent of its preferred shares. This preferred stock pays a 7 percent annual cumulative dividend. No dividends are in arrears at the current time. How is the noncontrolling..

  What is unearned revenue and why is it considered liability

What is unearned revenue and why is it considered a liability? When is unearned revenue recognized in the financial statements?

  Determine the contribution margin per direct labor-hour

The Bird Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the dolls is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year.

  How many equivalent units for conversion costs

Lexicon, Inc. had beginning inventory in March consisting of 15,000 units (60 percent converted) and ending inventory consisting of 20,000 units (40 percent converted). In addition, 45,000 units were started during the period. How many equivalent ..

  What amount it report as cumulative effect of changing

Vandross Company has recorded bad debt expense in the past at a rate of 1.5% of net sales. In 2012, Vandross decides to increase its estimate to 2%.

  How is tax basis calculated

What is the economic and tax policy rationale regarding corporate formation? When will a transfer be deemed a taxable event? How is basis determined? What if assets are contributed to a corporation by a non shareholder such as a government entity?

  Expected returns on assets and certainty equivalent

What is the expected return of this asset? What is Esperanza's expected utility? What is her certainty equivalent? Suppose that Esperanza can purchase insurance that guarantees her a return of $4900 regardless of the return on the asset.

  What is an audit procedure

How does the auditor's responsibility for detecting errors differ from their responsibility to detect fraud?

  Determining the payback period of doris company

Doris Co. is considering purchasing a new machine which will cost $200,000, but which will decrease cash expenses each year by $20,000. The useful life of the machine is 10 years.

  Determine the budget for the department

The department actually completed 5000 hours of production. Determine the budget for the department assuming that it uses flexible budgetting.

  Determining the depletion expense

The estimated residual value of the property is $80,000. During 2009, the company extracted and sold 4,000 tons of ore. The depletion expense for 2009 is:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd